GRAND BAOXIN AUTO GROUP LIMITED 廣匯寶信汽車集團有限公司

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. This announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of the Company. GRAND BAOXIN AUTO GROUP LIMITED 廣匯寶信汽車集團有限公司 (formerly known as Baoxin Auto Group Limited 寶信汽車集團有限公司 ) (Incorporated in the Cayman Islands with limited liability) (Stock code: 1293) PLACING OF NEW SHARES UNDER GENERAL MANDATE AND RESUMPTION OF TRADING Placing Agents (in alphabetical order) PLACING OF NEW SHARES UNDER GENERAL MANDATE On 6 June 2017 (before trading hours), the Company and the Placing Agents entered into legally binding placing arrangements, pursuant to which the Company has conditionally agreed to appoint the Placing Agents as agents, and each of the Placing Agents has conditionally agreed to act as agent for the Company, to procure the Placees to subscribe for, and failing which, to subscribe for itself, the Placing Shares (the Placing Arrangements ). The Placing Agreement was subsequently entered into between the Company and the Placing Agents to, among other things, confirm the Placing Arrangements. Assuming no further issue of new Shares or repurchase of Shares before the completion of Placing, the Placing Shares of up to 280,000,000 new Shares represent (i) approximately 10.95% of the existing issued share capital of the Company of 2,557,311,429 Shares as at the date of this announcement; and (ii) approximately 9.87% of the Company s issued share capital of 2,837,311,429 Shares as enlarged by the allotment and issue of the Placing Shares. 1

The Placing Price of HK$3.50 represents (i) a discount of approximately 13.37% to the closing price of HK$4.04 per Share as quoted on the Stock Exchange as at the Last Trading Day; and (ii) a discount of approximately 8.23% to the average closing price of HK$3.814 per Share as quoted on the Stock Exchange for the last five consecutive trading days immediately prior to and including the Last Trading Day. The maximum gross proceeds and the maximum net proceeds from the Placing will be HK$980,000,000 and approximately HK$972,160,000 respectively, which are intended to be used for expansion and development of the Group s business and general working capital purposes. The Placing is conditional upon, among other things, the Listing Committee of the Stock Exchange granting or agreeing to grant the listing of, and permission to deal in, the Placing Shares. The Placing Shares are to be issued and allotted under the General Mandate. The allotment and issue of the Placing Shares is not subject to the approval of the Shareholders. Completion of the Placing is subject to the satisfaction of the conditions in the Placing Agreement. The Placing may or may not proceed, Shareholders and potential investors are advised to exercise caution when dealing in the Shares. RESUMPTION OF TRADING At the request of the Company, trading in the Shares has been halted from 9:00 a.m. on Tuesday, 6 June 2017 pending the release of this announcement. The Company has applied for the resumption of trading of the Shares on the Stock Exchange with effect from 9:00 a.m. on Wednesday, 7 June 2017. PLACING OF NEW SHARES UNDER GENERAL MANDATE On 6 June 2017 (before trading hours), the Company and the Placing Agents entered into legally binding placing arrangements, pursuant to which the Company has conditionally agreed to appoint the Placing Agents as agents, and each of the Placing Agents has conditionally agreed to act as agent for the Company, to procure the Placees to subscribe for, and failing which, to subscribe for itself, the Placing Shares. The Placing Agreement was subsequently entered into between the Company and the Placing Agents to, among other things, confirm such Placing Arrangements. 2

THE PLACING AGREEMENT Date : 6 June 2017 Parties : The Company and the Placing Agents The Placing Agents Each of the Placing Agents has been appointed to procure the Placees to subscribe for, and failing which, to subscribe for itself, the Placing Shares at the Placing Price. To the best of the Directors knowledge, information and belief, having made all reasonable enquiries, each of the Placing Agents and its ultimate beneficial owners are Independent Third Parties. The Placees The Placing Shares will be placed to not less than six Placees (who will be professional, institutional or other investors). Each of the Placing Agents has agreed to use its best endeavours to ensure that each Placee and its ultimate beneficial owner are not (and will not as a result of the Placing become) connected persons of the Company. Number of Placing Shares Assuming no further issue of new Shares or repurchase of Shares between the date of this announcement and the completion of the Placing, the Placing Shares represent (i) approximately 10.95% of the existing issued share capital of the Company of 2,557,311,429 Shares as at the date of this announcement; and (ii) approximately 9.87% of the Company s issued share capital of 2,837,311,429 Shares as enlarged by the allotment and issue of the Placing Shares. The aggregate nominal value of the maximum number of Placing Shares under the Placing is HK$2,800,000. Placing Price The Placing Price of HK$3.50 represents: (a) (b) a discount of approximately 13.37% to the closing price of HK$4.04 per Share as quoted on the Stock Exchange as at the Last Trading Day; and a discount of approximately 8.23% to the average closing price of HK$3.814 per Share as quoted on the Stock Exchange for the last five consecutive trading days immediately prior to and including the Last Trading Day. After taking into account all related costs, fees, expenses and commissions of the Placing, the net Placing Price will be approximately HK$3.472 per Placing Share. The Placing Price was determined and negotiated on an arm s length basis between the Company and the Placing Agents with reference to, among others, the prevailing market price of the Shares. The Directors (including the independent non-executive Directors) consider that the Placing Price is fair and reasonable based on the prevailing market conditions and is in the interests of the Company and the Shareholders as a whole. 3

Rights and ranking of Placing Shares The Placing Shares will, upon allotment and issue, be free from all liens, charges, encumbrances or third party rights of whatsoever nature and together with all rights attaching thereto at completion of the Placing and thereafter. The Placing Shares, when allotted, issued and fully paid, will rank pari passu in all respects among themselves and with the Shares in issue as at the date of allotment and issue of the Placing Shares. General Mandate to allot and issue the Placing Shares The Placing Shares will be allotted and issued under the General Mandate. Under the General Mandate, the Directors are authorised to issue up to 511,462,285 new Shares (representing 20% of the then aggregate number of issued Shares as at the date of the annual general meeting of the Company held on 16 June 2016). As at the date of this announcement, the General Mandate has not been utilised. Accordingly, no Shareholder s approval is required for the Placing. Conditions of the Placing Agreement Completion of the Placing is conditional upon the fulfillment or waiver of the following conditions (other than condition (a) below, which cannot be waived): (a) (b) the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, the Placing Shares (and such listing and permission not subsequently being revoked prior to the delivery of definitive share certificate(s) representing the Placing Shares pursuant to the Placing Agreement); and the Placing Agents having received a copy of the US legal opinion from the Company s US legal counsel in form and substance satisfactory to the Placing Agents. Completion Completion of the Placing will take place on the Completion Date or as soon as practicable thereafter or such other time and/or date to be agreed between the Company and the Placing Agents in writing. If the above conditions are not satisfied and/or waived (other than condition (a) above, which cannot be waived) by the Placing Agents prior to 8:00 a.m. (Hong Kong time) on 14 June 2017, the Placing will be terminated and the Placing will not proceed and all obligations and liabilities of the parties hereunder will forthwith cease and determine and no party will have any claim against the others (save for any antecedent breaches thereof). 4

Termination The Placing Agents may, after consultation with the Company, terminate the Placing Agreement without liability to the Company by notice in writing prior to 8:00 a.m. (Hong Kong time) on the Completion Date, if: (i) there develops, occurs or comes into force: (a) any new law or regulation or any change (whether or not permanent) or development (whether or not permanent) involving a prospective change in existing laws or regulations or the interpretation or application thereof by any court or other competent authority which in the sole opinion of the Placing Agents is or is likely to be materially adverse to the consummation of the Placing, or makes or is likely to make it impracticable or inadvisable or inexpedient to proceed therewith; or (b) (c) (d) (e) (f) any event, or series of events beyond the reasonable control of the Placing Agents (including, without limitation, any calamity, act of government, strike, labour dispute, lock-out, fire, explosion, flooding, earthquake, civil commotion, economic sanctions, epidemic, pandemic, outbreak of infectious disease, outbreak or escalation of hostilities, act of terrorism and act of God) involving Hong Kong, the People s Republic of China, the United Kingdom, the European Union or the United States, or the declaration by Hong Kong, the People s Republic of China, the United Kingdom, or the United States of war or a state of emergency or calamity or crisis; or any change or development in local, national or international financial, political, economic, legal, military, industrial, fiscal, regulatory, currency or market conditions (including, without limitation, conditions in the stock and bond markets, money and foreign exchange markets, interbank markets and credit markets) which in the sole opinion of the Placing Agents is or is likely to be materially adverse to the consummation of the Placing, or makes or is likely to make it impracticable or inadvisable or inexpedient to proceed therewith; or any change or development in local, national or international securities market conditions or currency exchange rates or exchange controls which in the sole opinion of the Placing Agents is or is likely to be materially adverse to the success of the Placing, or makes or is likely to make it impracticable or inadvisable or inexpedient to proceed therewith; or any suspension of dealings in the Shares during the Placing Period whatsoever (other than as a result of the Placing); or any moratorium, suspension, material restriction or limitation on trading in shares or securities generally on the Stock Exchange due to exceptional financial circumstances or otherwise at any time prior to the Completion Date; or 5

(ii) (a) any breach of any of the representations, warranties and undertakings by the Company set out in the Placing Agreement comes to the knowledge of the Placing Agents; (b) any event occurs or any matter arises on or after the date hereof and prior to the completion of the Placing which if it had occurred or arisen before the date hereof would have rendered any of the representations, warranties and undertakings set out in the Placing Agreement untrue or incorrect; or (c) there has been a breach of, or failure to perform, any other provision of the Placing Agreement in any material respect on the part of the Company; or (iii) there is any change, or any development involving a prospective change, in or affecting the business, general affairs, management, prospects, assets and liabilities, shareholders equity, results of operations or position, financial or otherwise, of the Group (other than those already disclosed to the public on or before the date of this Agreement) as a whole which in the sole opinion of the Placing Agents is materially adverse to the consummation of the Placing, or makes it impracticable or inadvisable or inexpedient to proceed therewith. In the event that the Placing Agents terminate the Placing Agreement due to any of the above termination events, all obligations of each of the parties to the Placing Agreement shall cease and determine and no party shall have any claim against any other party in respect of any matter arising out of or in connection with the Placing Agreement, save for any antecedent breaches and certain liabilities under the Placing Agreement. The Placing Agents shall have the right exercisable at any time by notice in writing to the Company to terminate the Placing Agreement if any of the Placing Shares are not delivered by or on behalf of the Company in accordance with the Placing Agreement. The Directors are not aware of the occurrence of any of such termination events as at the date of this announcement. Undertaking of the Company The Company undertakes to each of the Placing Agents that for a period from (and including) the date of the Placing Agreement to (and including) 3 December 2017, neither the Company nor any person acting on its behalf will: (i) sell, transfer, dispose, allot or issue or offer to sell, transfer, dispose, allot or issue or grant any option, right or warrant to subscribe (either conditionally or unconditionally, or directly or indirectly, or otherwise) any Shares or any interests in Shares or any securities convertible into or exercisable or exchangeable for or substantially similar to any Shares or interest in Shares (save for any Shares to be issued pursuant to any employee share incentive plan); or (ii) agree (conditionally or unconditionally) to enter into or effect any such transaction with the same economic effect as any of the transactions described in (i) above; or (iii) announce any intention to enter into or effect any such transaction described in (i) or (ii) above without first having obtained the written consent of the Placing Agents. 6

INFORMATION ON THE GROUP The Group is a leading luxury 4S dealership group in the PRC and is principally engaged in the sale and service of motor vehicles. REASONS FOR THE PLACING AND USE OF PROCEEDS The maximum gross proceeds from the Placing will be HK$980,000,000. The maximum net proceeds from the Placing (after deducting the commission payable to the Placing Agents and other costs, expenses and fees incurred in the Placing) will amount to approximately HK$972,160,000 which is intended to be used for expansion and development of the Group s business and general working capital purposes. The Placing Agents commission for the Placing was arrived at after arm s length negotiation between the Company and the Placing Agents with reference to the prevailing market practice. The Directors (including the independent non-executive Directors) consider that the placing commission is fair and reasonable based on the prevailing commission charged by other placing agents and is in the interests of the Company and the Shareholders as a whole. The Directors consider that the Placing will enlarge the shareholder and capital base of the Company and also increase the overall liquidity of the Shares and strengthen the financial position of the Group. The Directors consider that the terms of the Placing Agreement (including the Placing Price and the Placing commission) are fair and reasonable and in the interests of the Company and the Shareholders as a whole. FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS The Company had not conducted any fund raising activity involving issue of its securities in the past twelve months immediately preceding the date of this announcement. SHAREHOLDING STRUCTURE The existing shareholding structure of the Company and the effect on the shareholding structure of the Company upon completion of the Placing, to the best knowledge of the Directors, is set out as below: At the date of this announcement Immediately after completion of the Placing Approximate Approximate No. of Shares % No. of Shares % Shareholders China Grand Automotive Services (Hong Kong) Limited (Note) 1,917,983,571 75 1,917,983,571 67.60 Placees 280,000,000 9.87 Other public Shareholders 639,327,858 25 639,327,858 22.53 Total 2,557,311,429 100 2,837,311,429 100 7

Note: China Grand Automotive Services (Hong Kong) Limited is a wholly-owned subsidiary of China Grand Automotive Services, Co., Ltd ( 廣匯汽車服務股份公司 ), a company established under the laws of the PRC, the shares of which are listed on the Shanghai Stock Exchange (SSE Stock Code: 600297). GENERAL Application will be made by the Company to the Listing Committee of the Stock Exchange for the grant of the listing of, and permission to deal in, the Placing Shares. Completion of the Placing is subject to the satisfaction of the conditions in the Placing Agreement. The Placing may or may not proceed. Shareholders and potential investors are advised to exercise caution when dealing in the Shares. RESUMPTION OF TRADING At the request of the Company, trading in the Shares has been halted from 9:00 a.m. on Tuesday, 6 June 2017 pending the release of this announcement. The Company has applied for the resumption of trading of the Shares on the Stock Exchange with effect from 9:00 a.m. on Wednesday, 7 June 2017. DEFINITIONS In this announcement, the following expressions have the meanings set out below unless the context requires otherwise: associates Board Business Day Company Completion Date connected person(s) Director(s) has the meaning ascribed thereto under the Listing Rules the board of directors of the Company any day (excluding a Saturday) on which licensed banks are generally open for business in Hong Kong Grand Baoxin Auto Group Limited ( 廣匯寶信汽車集團有限公司 ) (formerly known as Baoxin Auto Group Limited 寶信汽車集團有限公司 ), an exempted company incorporated in the Cayman Islands on 6 September 2010 with limited liability, the ordinary shares of which are listed on the Main Board of the Stock Exchange (stock code: 1293) the Business Day after the date on which the conditions as set out in paragraph headed Conditions of the Placing Agreement of this announcement are fulfilled but in any event no later than 14 June 2017, or such other date to be agreed between the Company and the Placing Agents in writing has the meaning ascribed thereto under the Listing Rules the director(s) of the Company 8

General Mandate the general mandate granted to the Directors by the Shareholders at the annual general meeting of the Company held on 16 June 2016 to allot, issue and deal with up to 20% of the then aggregate number of issued Shares as at the date of the annual general meeting Group HK$ Hong Kong Independent Third Party(ies) Last Trading Day Listing Rules Placees Placing Placing Agents the Company and its subsidiaries from time to time Hong Kong dollars, the lawful currency of Hong Kong Hong Kong Special Administrative Region of the People s Republic of China independent third party(ies) who is/are not connected person(s) of the Company and is/are independent of and not connected with the Company and the Directors, chief executives, controlling Shareholders and substantial Shareholders of the Company or any of its subsidiaries or their respective associates 5 June 2017, being the last trading day prior to the signing of the Placing Agreement, which took place on 6 June 2017 the Rules Governing the Listing of Securities on the Stock Exchange any independent professional, institutional or other investors procured by the Placing Agents to subscribe for any of the Placing Shares pursuant to the Placing Agreement the placing of up to 280,000,000 Placing Shares by the Placing Agents pursuant to the terms of the Placing Agreement Morgan Stanley & Co. International plc and UBS AG Hong Kong Branch Placing Agreement the placing agreement dated 6 June 2017 entered into between the Company and the Placing Agents in relation to the Placing Placing Period Placing Price Placing Share(s) the period commencing upon the execution of the Placing Agreement and terminating at 8:00 a.m. (Hong Kong time) on the Completion Date (or such later time and date as the Company and the Placing Agents may agree in writing) HK$3.50 per Placing Share up to 280,000,000 new Shares to be placed by the Placing Agents pursuant to the terms of the Placing Agreement 9

Share(s) Shareholder(s) Stock Exchange the ordinary shares of HK$0.01 each in the issued share capital of the Company the holder(s) of the shares of Company The Stock Exchange of Hong Kong Limited % per cent By order of the Board Grand Baoxin Auto Group Limited Mr. Li Jianping Chairman Shanghai, the People s Republic of China 6 June 2017 As at the date of this announcement, the executive Directors are Mr. LI Jianping, Mr. WANG Xinming, Mr. LU Ao and Mr. QI Junjie, the non-executive Directors are Mr. ZHOU Yu and Mr. LU Linkui, and the independent non-executive Directors are Mr. DIAO Jianshen, Mr. WANG Keyi and Mr. CHAN Wan Tsun Adrian Alan. 10